strengthen the guidance on risk governance, including the risk management roles played by business units, risk management teams, and internal audit and control functions (the three lines of defence) and the importance of a sound risk culture to drive risk management within a bank;

expand the guidance on the role of the board of directors in overseeing the implementation of effective risk management systems;

emphasise the importance of the board's collective competence as well as the obligation on individual board members to dedicate sufficient time to their mandates and to remain current on developments in banking;

provide guidance for bank supervisors in evaluating the processes used by banks to select board members and senior management; and

recognise that compensation systems form a key component of the governance and incentive structure through which the board and senior management of a bank convey acceptable risk-taking behaviour and reinforce the bank's operating and risk culture.

Effective corporate governance is critical to the proper functioning of a bank, the banking sector and the economy. While there is no single approach to good corporate governance, the Committee's revised principles provide a framework within which banks and supervisors should operate to achieve robust and transparent risk management and decision-making and, in doing so, promote public confidence and uphold the safety and soundness of the banking system.

The Committee welcomes comments on this consultative document. Comments on the proposals should be uploaded here by Friday 9 January 2015. Alternatively, comments may be sent by post to: Secretariat of the Basel Committee on Banking Supervision, Bank for International Settlements, CH-4002 Basel, Switzerland. All comments may be published on the website of the Bank for International Settlements unless a respondent requests confidential treatment.